US inflation at 40 years peak as prices soars
New Delhi : With a price hike in basic amenities like gas, food and other goods, the inflation in the United States is at 40-year high.
Consumer prices surged 8.6% last month from a year earlier, faster than April’s year-over-year increase of 8.3%, the Labor Department said Friday. The new inflation figure, the highest since 1981, will heighten pressure on the Federal Reserve to continue raising interest rates aggressively.
The main reason behind the hike in prices is because of supply chain disruption in the US due to Russia-Ukraine war. The increasing pressure on Fed to raises rate has created a situation where risk of recession may rise.
Gas prices rose 4% just in May and have soared nearly 50% in one year. The national average price at the pump reached $4.99 Friday, according to AAA, edging closer to an inflation-adjusted record high of $5.40.
With ongoing world war situation and US supporting Ukraine, the situation is unlikely to improve in recent times.